Energy: Centrica Signs £13bn Norwegian Gas Deal

Centrica Signs £13bn Norwegian Gas Deal

Centrica has signed a £13bn deal with the Norwegian company Statoil to supply gas to the UK, in a deal that the company said would be a boost to energy security. The agreement will see 50 billion cubic metres of natural gas made available over 10 years from 2015, equivalent to around 5% of the UK's total demand.

The deal is part of a package that also sees Centrica, the parent company of British Gas, pay £965m for oil and gas assets in the North Sea, including the Kvitebjørn field and Valemon, a major development prospect.

The two parties have also agreed to cooperate on future exploration in Norway and the UK, as part of Centrica's drive to become a bigger player further upstream in the gas business.

Statoil is Europe's second largest gas supplier. Natural gas comprises around 45% of the UK's total energy mix, according to the Department of Energy and Climate Change, and is expected to take on an increasing role as the country phases out more polluting fuels.

Household energy prices have been on the rise, in part due to supply concerns driving up the wholesale price. In October, the government was forced to call a summit of leading energy suppliers after Ofgem, the regulator, announced that the average dual fuel bill in the UK had spiralled to £1,345 per year.

In a statement accompanying Centrica's announcement, Prime Minister David Cameron said: "Gas plays a central role in powering our economy, and will continue to do so for decades to come. Today's agreement will help to ensure the continued security and competitiveness of gas supplies to Britain, from a trusted and reliable neighbour."

North Sea oil and gas has undergone a surge in interest over the past few months, with a consortium, including BP and Shell, announcing a £10bn investment into the region in October.

On Friday, Scottish energy minister Fergus Ewing told parliament that the UK's North Sea assets were worth more than £1tr.


What's Hot